India is boosting the share of domestic coal used in power plants designated to run on imported fuel, as rising local coal production and expanding renewables have helped to cut coal imports to multi-year lows.
India has raised the use of domestic coal to 50% at many power plants that have typically run on imported coal, industry and government officials told Reuters on Wednesday.
Power producers are currently running the coal-fired power plants on a mix of imported and domestic coal, and some plants have hit a 70% share of domestic coal, according to Reuters’ sources.
India, the world’s second-biggest coal importer and user after China, has used domestic coal to operate 5.7 gigawatts (GW) of capacity at the 18.7-GW plants using imported coal so far this year, with efforts underway to move another 4.3 GW of capacity to using domestic coal.
Higher domestic production and rising renewable energy installations have been key to the switch to domestic coal.
India has a goal to slash its thermal coal imports and has been succeeding in this endeavor in recent months.
Between January and May, thermal coal imports into India slumped to a four-year low, as purchases fell by 12% from a year earlier, according to commodities consultancy BigMint.
Still, overall coal-fired power generation and capacity installations in India continue to rise, and coal remains a key pillar of India’s electricity mix with about 60% share of total power output.
Despite booming renewable capacity additions, India continues to rely on coal to meet most of its power demand as authorities also look to avoid blackouts in cases of severe heat waves.
Coal will still be a key part of India’s power system for the next two decades, Rajnath Ram, adviser for energy at the government policy think tank, NITI Aayog, said at the end of last year.
“We cannot be subjective about coal. The question is how sustainably we can use it,” the official noted.
By Tsvetana Paraskova for Oilprice.com
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